In Atlanta, price growth is stronger and homes are selling faster than they are in the U.S. overall, trends explained in part by the surge in people looking to move inland.
Atlanta area home prices were up 4.8 percent annually to a median of $229,900 in January, marking nearly seven years of growing prices. While notoriously hot West Coast markets are cooling—prices in San Francisco fell 5 percent and price growth in Seattle slowed to 0.6 percent year over year last month—some signs indicate that Atlanta is bucking the trend.
“Atlanta is probably the nation’s hottest large market,” Redfin CEO Glenn Kelman said yesterday during the company’s earnings call, “continuing a trend favoring affordable, diverse and builder friendly cities.”
Following nearly three years of price growth that was consistent with the national rate, Atlanta’s home prices have been growing at a faster rate than the U.S. overall since April 2018. So far this year, national home prices are up about 3 percent from last year.
Atlanta experienced a 13.5 percent annual drop in home sales last month, while national home sales declined 7.6 percent over the same period. One factor that could be holding back sales activity is inventory. The number of homes for sale in Atlanta fell 18.5 percent in January, marking the 17th consecutive month of double-digit supply declines. New listings have followed a different trajectory, rising 19.8 percent in January, the fifth straight month of year-over-year increases.
Homes in Atlanta are selling faster than they were last year while the national pace is slowing down. The typical home that sold in Atlanta in January spent 48 days on the market, down from 57 days in January 2018. Nationwide, the typical home that sold in January went under contract in 57 days, up from 56 during the same month last year. In San Francisco, where the typical home went under contract in 25 days in January 2018, median days on market jumped to 42 days last month.
Local Redfin agent Cynthia Little said although inventory is still down in Atlanta, new construction may soon add to the supply of homes in the area. Building permits were up 72.2 percent annually in October of last year, the most recent month for which permit data is available, and the city issued a record $5.6 billion worth of building permits in 2018. She expects the market to heat up as winter turns to spring.
“Inventory is still low and there’s competition for desirable homes,” Little said. “We have a lot of new homes going up, but builders can’t build fast enough.”
“A lot of people, especially younger people, are looking to move to Atlanta and its suburbs from more expensive areas. I’ve been meeting with homebuyers from places like California, Maryland, Virginia and Washington, D.C., and they’re looking in Atlanta because they perceive it to be more affordable,” Little continued. “A lot of my clients are excited that mortgage rates aren’t going up, even some who aren’t buying just yet.”
Redfin migration data reflects the surge of people looking to move to Atlanta from expensive coastal areas. In the fourth quarter of last year, Atlanta was the third most popular migration destination for Redfin.com users looking to relocate: Among people searching for homes in Atlanta, 26.8 percent were from outside the metro area, up from 10.2 percent last year. Among people looking to relocate to Atlanta last quarter, 35.9 percent were from the New York City area, making it the most common origin for people looking to move to Atlanta.
Of the markets Redfin serves, Atlanta was the 11th most competitive market in January, ahead of Washington, D.C. and not far behind Boston and Seattle.
“We’re seeing multiple offers for some homes, especially those near highly rated schools,” Little said. “Come spring and summer, I think the market is going to be competitive.”
For more data on Atlanta and other metro areas, check out the Redfin Data Center.
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